Trade war brewing between Russia and Belarus

Sept 02 2013

Alexei Topalov

Denis Lavnikevich

Uralkali CEO Vladislav Baumgertner had been detained for two months and charged with abuse of power and authority - an offense punishable by 3-10 years in jail under Belarusian law. Source: Reuters / Vostock Photo

Russia’s
reaction to the arrest in Minsk of Uralkali CEO Vladislav Baumgertner has
followed the traditional pattern. Rospotrebnadzor has called Belarusian
products (especially dairy) unsafe, and Transneft is warning of oil supply
cuts, citing the need to repair the Druzhba pipeline. Experts believe Moscow
has yet to engage its “heavy artillery” in this developing conflict.

“This was to be expected,” Alexei
Makarkin, senior vice president of the Center for Political Technologies, said.
“Rospotrebnadzor is a powerful weapon for Russia, both within the WTO [when
conflicts arise with Ukraine] and within the Customs Union [for use against
Belarus].”

News of the arrest of the Uralkali CEO
broke on Monday, Aug. 26. He was detained by Belarusian
law enforcement as he prepared to board a flight from Minsk, after negotiations
there with the prime minister of Belarus, Mikhail Myasnikovich; Baumgertner had
come to the country on the prime minister’s invitation in the first place.

It was initially reported that
Baumgertner had been detained for two months and charged with abuse of power
and authority — an offense punishable by 3–10 years in jail under Belarusian law.

On Wednesday, however, when Russian lawyers and the
detainee’s mother attempted to bring the basic necessities to him at the
pre-trial jail, they were only able to hand over toothpaste and a brush. The
officer on duty said the rest was “not allowed,” because the head of Uralkali
had not been arrested but detained for 72 hours.

Pavel Traulko, an official spokesman
for the Belarus Investigative Committee, announced that Baumgertner’s status
was that of an accused person subject to detainment.

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According to Andrei Dmitryev, deputy
head of the Belarusian civil campaign and pseudo political party Tell the Truth,
the Belarusian authorities — primarily Alexander Lukashenko—are using
Baumgertner’s arrest to provoke Russia and pursue a number of their own objectives.

“First of all: to demonstrate that it’s
Lukashenko rather than Putin who has the final say on the terms of post-Soviet
integration,” said Dmitryev. “Secondly: to show that the Belarusian president
is capable of standing up to the Kremlin. The former is intended for external
consumption and the latter for his domestic target audience.” Dmitryev believes
that Lukashenko is confident Putin will be the first to blink.

Moscow’s response has not been confined
to pressure exerted by Rospotrebnadzor. Transneft said on
Wednesday that it was planning to cut oil supplies to Belarus by 400,000
metric tons.

“Without a doubt, the reduction in
supplies also has to do with Baumgertner’s arrest,” said Konstantin Simonov,
head of the National Energy Security Fund. “The arrest of Uralkali’s CEO came
as a shock to the Russian government; for all practical purposes, it’s a personal
challenge to Vladimir Putin.”

The Kremlin is now going through its
deck of aces. As usual, Rospotrebnadzor is there to fire the opening shot,
followed by energy pressure — another favorite tool in Moscow’s arsenal.

According to Simonov, though, the
“heavy artillery” has yet to be brought in. The NESF head believes that, down the
road, oil supplies will be reduced even more.

“What is more, Russia might abandon the
project for building a nuclear power plant in Belarus [contracted by Rosatom],”
said Simonov. “In fact, Russia doesn’t even need this power plant, which will
become a direct competitor to the nuclear plant that Rosatom is building in the
Kaliningrad region.”